Why did the rise of Chainlink (LINK) fail at a critical moment?

Chainlink (LINK) broke through the six-week resistance level on May 8, but the subsequent performance has been quite lackluster. Since then, the price of LINK has hovered around the old resistance level of $15.5. In the second half of May, LINK fluctuated between $14.84 and $18, failing to establish a clear upward trend.

The rest of the altcoin market has also fallen into a gloomy state since May 10. In a previous report, Chainlink had very high development activity.

A closer look at the on-chain indicators shows that investors took profits in the price range of 16–18 dollars. Since most holders made profits after the price exceeded the resistance level of 15 dollars, they chose to sell LINK.

At the same time, demand also shows signs of stagnation. In this context, it is understandable that Chainlink cannot continue to rise in price.

The price movement after the breakout has dampened the spirits of the bulls LINK

LINK price chart | Source: TradingViewOn the daily chart, LINK has formed a lower high structure after being rejected at the resistance level of 17.42 dollars.

After testing the resistance level at the beginning of May, Chainlink has created lower highs and equal lows — a triangle pattern. The OBV (On-Balance Volume) indicator has continuously declined over the past three weeks.

In fact, previous analysis has indicated selling pressure based on the Average Coin Age metric and this has not changed.

Although the Stochastic RSI indicator has bottomed out and the RSI has returned to retest the neutral level of 50, the bearish pressure in the market is increasing.

This could cause LINK to fall back into the range and possibly drop deep down to the support level in the middle – around 13.2 dollars.

Source: CoinglassThe liquidation map for Chainlink over the past month shows a "price absorption zone" at a resistance level of $14.8. If the price tests this liquidity cluster, LINK may face a projected price drop of nearly 8% in the coming days.

Above, the local peaks at $17.3 and higher contain a large amount of liquidation orders. Due to a lack of demand for Chainlink, the likelihood of a price drop is assessed to be higher.

Minh Anh